UPDATE 2-Canada says to keep Keystone XL issue alive with U.S.

Reuters Staff

3 Min Read

(Adds Breakingviews link)

By Richard Woodbury

HALIFAX, Nova Scotia, April 22 (Reuters) - Far from giving up on the Keystone XL pipeline to the United States, Finance Minister Joe Oliver said on Tuesday Canada would keep the issue alive with the Obama administration despite a further delay of the U.S. decision on whether to approve it.

Oliver, who vigorously promoted the TransCanada Corp crude oil line as natural resources minister before taking over at finance last month, told reporters he was very disappointed that the U.S. had delayed the decision on Friday “yet again.”

Asked if Canada’s Conservative government should wait until a new U.S. administration was elected before making a renewed push, he said: “I think it’s important for Canada to keep the issue alive.”

“After all, this is a project which is supported by a strong majority of Americans, by a commanding majority of senators and congressmen, by every governor through whose state the pipeline would go. It is widely supported and we want to continue to remind people that the project is there.”

The State Department extended a comment period on the $5.4 billion, 830,000 barrel-per-day project, a move that could well delay a final decision until after the U.S. mid-term elections in November.

Oliver said the U.S. delay would affect economic growth and jobs on both sides of the border.

He also said it was an issue of national security, pointing out that Canadian oil would supplant crude from Venezuela, which had threatened to cut off oil supplies to the United States five times in the previous five years.

Europe’s exposure to a possible cut-off of Russian natural gas and the crisis in Ukraine demonstrate “the vulnerability that countries have when they rely on non-reliable sources of energy,” he added. “Canada is a reliable source of energy.”

Critics say the pipeline would only encourage the development of the oil sands, and thereby worsen global warming. Oil companies use large amounts of natural gas to make steam to liquefy heavy oil reserves, creating more carbon dioxide than conventional production.

“I hope people would stick to the facts. The fact is that the oil sands represent a miniscule proportion of greenhouse gas emissions, one one-thousandth, and we have done a great deal to reduce the intensity of emissions,” he said.

Coal-fired electricity production in the United States emits 33 times more than all the oil sands put together, he said.

Asked about environmental activists coming to Canada to focus on the oil sands, he said: “I think that perhaps people coming from the United States might contemplate what the record is there and take that into account.”

Canada’s emissions per capita and in relation to gross domestic product are somewhat lower than in the United States, he added. (Writing by Randall Palmer and Louise Egan; Editing by Jeffrey Hodgson and Chris Reese)